As we reach mid-2024, it’s time to revisit our predictions from the last Boom and Bust report released in November 2023. Typically, by this point in the year, some scenarios can be ruled out based on market performance. However, 2024 has proven to be an exception. With uncertainties surrounding migration trends and ongoing tensions in the Middle East, certain projections remain challenging to pin down. Even if global events escalate, their full impact on the Australian housing market is more likely to be felt in 2025 rather than this year. Consequently, we are striking out scenarios 2 and 4 from our previous report.
Housing Market Projections for the Rest of 2024
As we move forward, the two key factors likely to shape the remainder of 2024 are any potential slowdown in Australian population growth and changes in interest rates. While official migration data tends to lag by six to nine months, there are indications that the influx of international students into cities like Sydney and Melbourne is waning. This is particularly evident in the softening rental markets in these inner-city areas.
Given these factors, our base case scenario of a housing price slowdown, especially in Sydney and Melbourne, appears to be the most likely outcome for the rest of 2024.
City-Specific Insights
| City | 2024 Forecast | Current Market Performance | Key Factors |
|---|---|---|---|
| Perth | 5% to 9% increase in dwelling prices | Likely to see 20%+ gains | Strong employment growth, interstate migration, underbuilding, favorable GST deal |
| Brisbane | 4% to 8% increase (up to 11% if population growth remains strong) | Expected 15% to 20% increase | Rapid population growth, strong market indicators |
| Darwin | -3% to +1% (falling to flat market) | Prices down by 2% | Elevated stock levels, economic slowdown, decreased demand |
| Melbourne | -5% to -1% decline | Prices declining, auction clearance rates weakening | Rising stock levels, declining rents, population growth slowdown |
| Sydney | -4% to 0% decline | Prices down 0.2%, 12-month change up 5% (expected to fall) | Slowing population growth, elevated interest rates |
| Adelaide | 0% to 3% increase (up to 7% with strong population growth) | Prices up 12% (expected 15% to 20% by year-end) | Strong economy, affordability, outperforming expectations |
| Hobart | -7% to -3% decline | Prices down 1.9% | Weak market conditions, decline expected to continue |
| Canberra | -4% to -8% decline | Prices down 0.8%, with recent 1.5% drop in asking prices | Market weakening, rising listings, expected further declines |
Perth
Perth has been a standout performer in 2024, surpassing even our most optimistic forecasts. Initially, we projected a 5% to 9% increase in dwelling prices, but Perth is now on track to see gains exceeding 20%. Strong employment growth, interstate migration, underbuilding, and favorable GST receipts have all contributed to this boom. However, falling commodity prices, particularly in iron ore, could temper this growth if global markets decline.
Brisbane
Brisbane has also exceeded expectations, with dwelling prices likely to finish the year up by 15% to 20%—a growth rate not seen since the mid-2000s. While we anticipated a strong year, the city’s market has outpaced even our highest forecasts, suggesting that population growth in Southeast Queensland may be stronger than anticipated.
Darwin
Darwin’s market has followed our base case scenario, with prices declining by 2% over the past year. Elevated stock levels and a slowdown in demand have contributed to a glut of housing, aligning with our prediction of a flat to slightly negative market for 2024.
Melbourne
Melbourne is on track with our base case forecast, which predicted a market decline of 1% to 5%. After a robust start to the year, auction clearance rates have weakened, and stock levels have risen above long-term averages, leading to falling prices and declining rents.
Sydney
Sydney’s housing market is performing as expected, with prices down 0.2% year to date. Our forecast of a 0% to 4% decline for 2024 remains on target, as slowing population growth and elevated interest rates continue to dampen demand.
Adelaide
Adelaide’s housing market has outpaced our predictions, with prices up by 12% year to date. We initially forecasted modest growth of 0% to 3%, but the city’s strong economy and relative affordability have driven prices higher than anticipated.
Hobart
Hobart’s market has weakened as expected, with a 1.9% decline in prices so far this year. Our forecast of a 3% to 7% drop remains on track, with no indicators suggesting a market turnaround in the near future.
Canberra
Canberra was expected to see the most significant declines in 2024, with forecasted falls of 4% to 8%. While prices have only dropped 0.8% so far, the market has shown signs of weakening, with asking prices down 1.5% in the past 30 days alone. We believe our forecast remains accurate, with further declines likely as the year progresses.
Conclusion
Overall, 2024 has presented a mixed bag of market conditions, with some cities experiencing unexpected growth while others align with our predictions. As we approach the end of the year, it’s crucial to stay informed and adaptable to any changes in market dynamics.
For a more detailed analysis and tailored advice on how these trends might impact your property investments, contact BOA & Co. at 1300 952 286 or email us at service@boanco.com.au. Visit our website at www.boanco.com.au to learn more about our services and how we can help you navigate the ever-changing housing market.